Granting a gift after one’s demise may be done only by drafting a will

A man has bequeathed real estate to his wife under a "heir-after-heir" mechanism whereby the assets that would be left after the wife's demise are to be transferred to the husband's relatives under the terms of his will. The woman's will bequeathed the property to relatives, but about 13 years after the husband's demise, at the age of 82 and when suffering from memory issues, she gifted two real estate assets to friends. Although the transfer of the assets was recorded at the Land Registry, the woman made it clear, even after signing the contract and being in a demented state, that she intended the assets to be transferred only after her death. Several months later, a specialist doctor's review determined that the woman is suffering from Alzheimer's Disease and a few months later a guardian was appointed to her, who demanded to cancel the gift.
The Supreme Court held that the gift agreements are void. While the purpose of the transfer was to circumvent the "heir-after-heir" mechanism, when a gift is meant to pass only after demise it must be drafted into a will under the provisions of the Israeli Inheritance Law and for this reason by itself the gift agreement are void. In addition, even statements of a dementic person may be used to interpret the person’s understanding of actions made by such person and, thus, the woman's statements may indicate her intention in making the agreements prior to the appointment of a guardian for her. Moreover, one's objective intent is a prerequisite to a contract's validity, and in particular to the validity of a gift transaction, as such are one-sided contracts, so that the gift recipient's reliance interest diminishes against the desire to express the will of the grantor, and thus a higher level of intent on the part of the grantor is required. Here, the woman's cognitive status did not allow her to form such intent, and in any case her statements that she intended to make the gift only after her death show that she did not intend to give a gift but rather to bequeath an assets after her demise, another reason for which the agreements are void.